Business expectations in the industrial sector up significantly

Business expectations in the industrial sector have improved significantly in the last two years, the Foundation for Economic and Industrial Research (IOBE) said in a report released on Monday.

IOBE attributed this development to better conditions prevailing in 2017 compared with 2016 and in 2015, when uncertainty over economic outlook and the imposition of capital controls negatively affected businesses in all economic sectors.

The report showed a gradual lifting of political and economic uncertainty domestically and an improvement in external demand that have positively affected domestic industry. It noted, however, that a high tax burden and poor funding from the banking sector are negatively affecting the business environment, but stressed that these factors have been offset significantly by the market.

The business expectations index in the industrial sector grew to 97.7 points in December 2017, from 93.6 points in November and 90.1 points in December 2016. The index rose to 93 points in 2017, up from 91.2 points in 2016. Industrial production grew 4.4 pct in the January-November period compared with the same period in 2016, with a 26 pct of industrial enterprises expecting an increase in their production in the next quarter and a 9.0 pct expecting a decline.

The employment outlook index rose by three points, with a 13 pct of enterprises expecting an increase in employment in the next quarter and another 13 pct expecting a decline.

A 27 pct of enterprises expect an increase in sales in the next quarter and a 10 pct expect a decline, with the current sales index rising moderately.

Export outlook grew to +9 in December, from +6 points in the previous quarter, while estimates over export trends in the coming months grew to +21 points from +17 points.

The business expectations index in consumer goods improved to 95.7 points in December from 93.8 in November, while the business expectations index in capital goods jumped to 105.3 points from 87.1 points. The index on intermediate goods rose to 98.2 points in December from 95.1 in November.